The Saxo Bank Outrageous Predictions, which have already become somewhat traditional, have been published.
In this case, the forecast for 2025 is meant. It is worth noting that any vision of the state of affairs that can potentially be formed in the future as a configuration of the situation defining the condition of objective reality in its various dimensions, including political, economic, and social, is an assumption that does not have absolute guarantees of subsequent materialization in the plane of practical actions. Also, in the appropriate context, it is relevant to pay attention to the fact that in the world as a global space of existence, a kind of axiom of the being will always remain in force, according to which even the most logical, predictable and seemingly guaranteed version of the dynamic of the order of things can be violated, significantly transformed or completely changed in terms of the vector to the opposite due to unforeseen factors. The future, as a form of reality that has yet to be realized, has many versions, but only one of them will become a state of affairs that defines, shapes, and fills the circumstances and processes taking place in the territory of life. This means that any forecast is not what can be described as a situation guaranteed in terms of prospects for subsequent materialization in new historical moments. At the same time, the vision of the future with a non-minimal degree of probability may reflect what will eventually become the content of reality to one degree or another. A multidimensional approach to planning should provide that any circumstance, even the least significant at a particular moment, can eventually transform into a factor of the most sensitive impact.
The forecasts of Saxo Bank, a Danish investment financial institution, are always wide-ranging in terms of covering possible scenarios of the dynamic of the state of affairs in many areas of activity and segments of the space of existence of human civilization. For many years, the lender, within the framework of forecasting, has been paying special attention to potential options for changing the situation in financial markets relative to the order of things that is observed at the time of the formation of the vision of the future.
It is worth noting that the probabilities described by Saxo Bank are not official market forecasts. Also, in this case, investors are faced with a reminder every year that any event in the future can become a major factor in changing the state of affairs, including at a fundamental level. Historical experience contains examples of how unlikely or even improbable circumstances became a source in the transformation of the status quo, which until a certain moment seemed to be an unshakable and maximum durable configuration of reality capable of coping with any challenges of new economic, political, or social conditions.
Saxo Bank’s forecast for the next year consists of several parts, the potential implementation of each of which means a certain degree of change in various situations. This vision of the future is not yet a fact of reality, but it can become one. The forecast covers probable events that could potentially form a new configuration of the global economy.
Experts of the financial institution warn that the actions of the new administration of Donald Trump, who won the United States presidential election last month and will return to the White House in January, could potentially have a significant impact on the dollar’s position. In this context, it was mentioned that the globalist system, which was formed against the background of the conditions and circumstances determining the reality of the existence of human civilization based on the results of World War II, was built on a combination of US security guarantees to protect the trade routes for the Free World and the use of the dollar as the chief currency for transactions and as a store of value. Even after the former President of the United States Richard Nixon broke the dollar’s link to gold in 1971, the mentioned currency continued to dominate the globalized economy.
As noted by Saxo Bank experts, Donald Trump during his first presidential term, which lasted from 2017 to 2021, bashed at the foundations of the global system. In this context, the requirements of tariffs on imported goods were mentioned to right the huge trade deficit of the United States and decry the costs of maintaining the vast US security umbrella. Washington’s allies in the security area alliance were shocked by such calls and actions. China at that time was put on notice. Then, in the space of world reality, a kind of force majeure factor of global impact came into force, which was the coronavirus pandemic. Over time, Donald Trump left the White House, and Joe Biden became president of the US. After that, many experts formed a firm opinion that Mr. Trump is a politician whose strategy of action is fundamentally different from the ideologues of the world order that determined the configuration of the global reality of human civilization after World War II. In November 2024, Donald Trump won the United States presidential election. In January, he will return to the White House, which is perceived by some experts and analysts as a kind of factor of significant changes, tentatively assessed as potentially alarming. The Saxo Bank forecast notes that the so-called Trump 1.0 was a preparatory act for deglobalization, and Trump 2.0 will become the main event with all its consequences for the dollar. Experts of the financial institution predict that next year the new administration of the US president will completely change the nature of Washington’s relations with the rest of the world. In the relevant context, such currently expected actions as massive tariffs on imports and slashing deficits with the help of an Elon Musk-run Department of Government Efficiency (DOGE) were mentioned. Experts of the financial institution underlined that the implications for the US dollar are dire for trade around the world. According to them, in this case, there is a cutting off of the needed supply of dollars to keep the wheels of the global USD system turning. At the same time, they noted that against the mentioned background, ironically, the exchange rate of the national currency of the United States may rise sharply. Nowadays, global financial players are trying to find alternatives to the dollar to protect their economies and ensure their development potential. China and the BRICS+ countries conduct transactions with gold-backed digital money and, to a certain extent, directly with the new gold-backed offshore yuan. In Europe, there is a scaling up of the practice of using the euro in the course of financial operations carried out as part of the implementation of trade relations. Gold-linked crypto stablecoins complement the mentioned mix. According to Saxo Bank experts, a new dramatic chapter is beginning in the global financial markets.
Also in the forecast of the financial institution, special attention is paid to the prospects of Nvidia, one of the main beneficiaries of the so-called artificial intelligence boom, next year. It’s worth mentioning that in the summer, the market capitalization of this company, which develops graphics processing units for training and subsequent operation of machine intelligence systems, exceeded the $3 trillion mark. In the context of reflections on Nvidia’s prospects, directly related to the high-intensity dynamic of artificial intelligence moving forward, Saxo Bank experts noted that during the gold rush, the only ones who are sure to get rich are shovel sellers, since most miners fail to find gold. In the sense of a conditional symbolic comparison, the mentioned company actually elaborates and sells those very shovels. Graphics processing units are a kind of basic element, without which neither the functioning of artificial intelligence in its current configuration nor the technological evolution of AI is possible. It is also worth noting that the comparison of the present active development of digital intelligence has been repeatedly stated by various experts to the gold rush, a period of disorganized mass gold mining in newly discovered deposits, characterized by a spontaneous influx of prospectors and predatory methods of their activities. The artificial intelligence industry is a more structured space in which there is no predation. At the same time, the AI market is at the stage of high-intensity scaling. The number of players in the artificial intelligence industry is rapidly increasing. It is worth noting that this is a natural process to the maximum extent since AI is actually the main technology of modernity. Artificial intelligence can modernize and make many workflows more efficient. Against this background, the thesis is true that AI can become a new platform for economic growth on a global scale. Moreover, the ability of artificial intelligence to generate original media content of various categories means its capability to carry out what can be described as informational and social impact. Besides, futurological forecasts provide that in the course of its technological evolution, AI can surpass the human mind in terms of cognitive abilities. Against the background of the prospects and already realizing the potential of artificial intelligence, a high level of global interest in investing in the relevant industry and the development of digital thinking systems is natural. It is possible that the current historical moment and the subsequent period will become what will be called the era of AI in the space of the chronology of the existence of human civilization.
Saxo Bank experts, comparing the present intensive forward movement of the artificial intelligence area with the gold rush, pay attention to such a common feature of these periods as an active desire to extract benefits. According to them, currently, monopolistic information technology giants and many startups are actively seeking to harness the golden promises of generative AI. The corresponding promises stretch from Meta’s Metaverse to incredible number-crunching loads to drive new apps like autonomous driving. Experts of the financial institution noted that Nvidia is the primary shovel-seller of the so-called AI gold rush. In the relevant context, it was underlined that this company develops not only modern chips but also the software ecosystem at the heart of the lion’s share of artificial intelligence data centers.
Saxo Bank experts predict that Nvidia’s success will increase next year. They explain the corresponding vision of the company’s prospects to the availability in the volume of its revolutionary 208-billion transistor Blackwell chip. This microcircuit drives up to a 25-fold increase in the performance of AI calculations per unit of energy consumed relative to the prior H100 generation. According to the mentioned experts, Nvidia is taking the crown as the most profitable company of all time amid an intensifying arms race in the area of artificial intelligence, when no technology giant or even the government wants to stay away, and a sharp rise in electricity costs in artificial intelligence data centers. They noted that in the context of the mentioned tendencies, a high level of demand for more powerful and at the same time less power-hungry Blackwell chips is being formed.
Saxo Bank experts predict that next year Nvidia’s profits will exceed Apple’s similar record figure of $105 billion. They also expect that in 2025, the company’s market capitalization indicator will almost double as a result of the growth of its business at a faster pace compared to preliminary projections regarding the intensity of the dynamic of the corresponding indicator. Saxo Bank experts predict that Nvidia will make it twice the size of Apple.
If the mentioned expectations become reality, the developer of graphics processing units will achieve a stable position as the most valuable company in the world, and its market capitalization will reach about $7 billion, which is equivalent to 10% of the global stock market.
At the same time, according to experts at Saxo Bank, the valuations of Apple and other technology giants are on a downward trajectory in relative terms. The corresponding tendency is because the profitability of the mentioned companies is declining due to the need to build titanic data centers to keep up in the artificial intelligence gold rush.
Saxo Bank experts noted that Nvidia’s shares trade well north of $250, until the market begins to ask questions about the firm’s ability to grab an increasing share of corporate profits, and as unwelcome regulatory scrutiny on its monopoly status tempers the outlook.
As for the assessment of the current condition of the Chinese economy, the mentioned analysts noted that nowadays this Asian country is mired in a classic balance sheet recession, similar to the situation in Japan in the 1990s. As part of the large-scale binge, Beijing inflated corporate debt and a debt bubble in the real estate market that has no analogs in world economic history. China’s corporate debt exceeds 150% of the gross domestic product (GDP) of an Asian country. Local government debt is 80-90% of GDP. Household debt in China is not as high as in other countries, but the corresponding state of affairs is largely due to a suffering real estate market.
Saxo Bank experts noted that when countries enter a balance sheet recession, all participants in the economy, both public and private, have a strong incentive to pay off debts to repair balance sheets. At the same time, the corresponding efforts to improve the financial situation only worsen the collective outlook, as economic activity and prices crater. Experts noted that during the balance sheet recession, the government can choose many paths, but in any case, there will be certain risks of a significant scale. Writing of debt means that the economy will deflate, and the wealthy class of creditors will be crushed. The absence of any measures means that the country will remain in dire straits for decades. If the government runs massive trade surpluses to have other countries finance its balance sheet repair as China is already trying to do, it risks the ire of other nations and trade wars. Forcing reflation with large-scale fiscal incentives provides the likelihood that inflation will provoke social unrest.
Saxon Bank experts expect Beijing to bet next year that reflation is the only answer. Also, according to them, the Chinese authorities are confident in their ability to cope with inflationary risks by implementing a huge set of fiscal initiatives. As part of the relevant measures, Beijing intends to allocate more than 50 trillion yuan (about $7 trillion) in 2025 and subsequent years. A significant portion of spending goes directly to consumers through the e-CNY digital currency. This means that funds are injected straight into the economy, and not to repay debts. Saxon Bank experts also noted that China is actively using social engineering in its incentive measures. As part of the relevant efforts, in particular, Beijing is encouraging companies to reduce working hours to improve the quality of life. Such solutions boost leisure time, increase consumption, and contribute to company formation, family formation, and childbearing.
Saxo Bank experts predict that there will be a strong reflationary impact in China and around the world. They also expect the yuan to strengthen.
Also, the forecast of the financial institution contains a more than optimistic scenario both for the healthcare area from a highly specialized point of view in particular, and for humanity as a whole. Saxo Bank expects that next year, as a result of an unprecedented scientific breakthrough, it will successfully bio-print a fully functional human heart. In this case, advanced 3D bioprinting technology will be used. As noted in the forecast, starting with high-resolution CT scans, scientists create an intricate digital model capturing every minute detail of the heart’s complex structure. This model is the blueprint for a state-of-the-art 3D bioprinter, which meticulously layers human stem cells and biodegradable scaffold materials to construct the organ with remarkable precision.
Saxo Bank predicts that success in bio-printed organs will contribute to rapid growth in the biotechnology and 3D printing sectors. As the financial institution notes, most companies operating in the relevant sector are currently at the start-up stage, but a massive initial public offering (IPO) of these firms’ shares is expected soon. According to the bank’s experts, this surge of innovation and investment can change the healthcare industry, which will lead to improved patient outcomes and significant economic growth.
Moreover, the financial institution’s forecast for 2025 contains the statement that the electrification boom will end OPEC. In this context, China’s kind of progressive experience in electrifying transport was mentioned. Beijing’s results in the relevant area of activity have significantly exceeded all preliminary expectations regarding the pace and scale of production and adoption of electric vehicles. Schroders, a nearly trillion-dollar asset manager, talked about China’s potential in the context of the country’s ability in the area of making the mentioned vehicles. The specified asset manager predicted that by the end of 2024, sales of electric vehicles in the Asian country could reach about 5 million and a share of 15% in the local market. At the same time, the reality turned out to be more impressive than the preliminary assumptions. Already last year, the number of electric vehicles registered in China exceeded 8 million. By September 2024, the share of vehicles of the mentioned category in the Asian country’s new car sales market reached 45%. The overall increase in electric vehicle sales in China exceeded 40% year-on-year. In this case, the growth rate is about six times higher than the indicators provided for by preliminary expectations.
Saxo Bank claims that other countries are joining China in expanding the production capacity for making electric vehicles. It is expected that the prices of batteries will decrease against the background of scaling of the corresponding tendency. As a result of this process, electric vehicles will become more financially accessible. Saxo Bank expects that eventually, the mentioned vehicles will become cheaper than their petrol-burning counterparts even without support in the form of subsidies. Experts of the financial institution said that against the background of exponential growth in the pace of adoption of electric cars, it is advisable to predict the peak oil in 2025. The bank’s analysts also expect an acceleration in the decline in oil demand in the coming years.
Experts of the financial institution noted that two-thirds of the oil ends up as gasoline or diesel fuel for cars and trucks. A decrease in demand for the mentioned mineral, according to Saxo Bank, will be the reason that OPEC will find a shrinking of its relevance. Experts of the financial institution stated that limits on oil production of several million barrels per day will not be able to prevent the mentioned process. They also noted that some OPEC member countries have already cheated production quotas to get as much income as possible. Moreover, experts underlined that demand for oil exports is already falling. According to them, most of the OPEC member countries understand that the situation has changed. Against the background of the bickering and in-fighting, some countries are leaving the organization. Experts at the financial institution say that OPEC’s days are numbered. It is worth noting separately that the corresponding point of view may be true in the sense that the organization will not be able to survive in the future of new technologies and power sources, but it is probably ahead of time since oil is still needed and zero or critically minimal demand, in this case, is not what will happen tomorrow.
Former OPEC members are increasing production volumes to secure market share. Against the background of the implementation of the relevant practice, oil prices are falling.
Saxo Bank experts note that the decline in the cost of crude oil is a favorable factor for airlines, manufacturers of chemical products, paints and tires, and freight and logistics companies. At the same time, an equilibrium is gradually forming in the market, as a result of which prices are gradually stabilizing. To a large extent, this process is because suppliers of more expensive oil, especially in North America, stop producing shale oil.
Another one part of Saxo Bank’s forecast foresees that the United States will impose a tax on artificial intelligence data centers next year as power prices show rapid growth. Experts of the financial institution expect that next year in the US there will be a massive increase in investment in power infrastructure. They also predict that companies such as Fluor will conclude large deals on the construction of new facilities. Moreover, experts at the financial institution predict that natural gas prices in the United States will more than double in the long term, which will be a significant factor in accelerating inflation.
Besides, analysts at Saxo Bank expect that in the mentioned country next year a catastrophic storm and rainfall will catch the insurance sector by surprise and cause damage that will significantly exceed the financial losses from Hurricane Katrina in the amount of $40 billion in 2005. They also warn that one of the largest US insurers will significantly underestimate the risks associated with climate change, which will cause lower prices for insurance policies in the affected region. Moreover, in their opinion, due to insufficient reserves to cover claims and inadequate reinsurance to mitigate the costs of an extreme event, panic will spread throughout the industry.
Another part of the Saxo Bank forecast provides that in 2025 sterling will erase the post-Brexit discount versus the euro. In this context, it was noted separately that the outlook of the United Kingdom continues to be constructive. Financial institution experts also said fresh fiscal policy winds are blowing in this country, where the new Labor government has announced budget priorities. The mentioned priorities do not provide for the most damaging types of tax increases for economic growth. Saxo Bank experts predict that sterling will grow to 1.27 versus euros next year. It was also noted that stimulating domestic investment and a more robust economic growth outlook support the UK currency.
As we have reported earlier, IMF Warns of Increasing Risks for Global Growth.
